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Tetra Technologies: Stock To Rise On Growth And Low Valuation

May 04, 2018 4:31 PM ETTETRA Technologies, Inc. (TTI)18 Comments


  • Tetra Technologies is expected to be profitable in 2018 as the company attracts more business for key products/services.
  • Conditions are positive for Tetra's businesses to thrive.
  • The low valuation and strong growth will catalyze the stock for above-average gains.

Tetra Technologies (NYSE:TTI) has been turning the corner in 2018. The company experienced a rough patch due to the oil slump over the past few years. A few years of losses have turned around with profitability this year. The improvement in the oil industry will allow the company to thrive this year and beyond.

Tetra Technologies is a key player in the oil and gas industry. The company has the major oil and gas companies as their customers. The new acquisition of SwiftWater strengthened Tetra and was accretive to Tetra's earnings as of March 1, 2018.

In addition to turning profitable in terms of net income in 2018, Tetra is expected to increase ROE to over 14% in 2019 after being in negative territory in past years. Tetra's strong expected EBITDA growth in 2018 is likely to drive the stock for strong gains. The company's low valuation will help support strong stock gains going forward.

Key Businesses for the Oil and Gas Industry

Tetra has multiple businesses that operate under three divisions: Fluids, Production Testing, and Compression. The Fluids business manufactures and markets clear brine fluids and additives for use in well drilling, completion, and workover operations. This division also sells liquid and dry calcium chloride and offers water management for oil/gas companies.

I expect Tetra's fluid business to pick up this year. Tetra is seeing more activity for the fluids business in several international markets. The pickup in business for oil and gas companies means there will be more well completions. This creates greater demand for Tetra's completion fluids.

The Production Testing division handles frac flowback, well testing, and offshore rig cooling. This division is benefiting from an increase in frac activity. I expect the Production Testing division to thrive in 2018 as the oil and gas industry continues to ramp up as

This article was written by

David Zanoni profile picture
Award Winning Kirk Spano's All-In-One Investing Service

Through diligent analysis, he is ranked in the top 1% of blogging analysts on Tipranks.com for performance and accuracy. David previously contributed to Kirk Spano's Margin of Safety Investing [MoSI] Marketplace Service and Risk Research Inc.

David focuses on growth & momentum stocks that are reasonably priced and likely to outperform the market over the long-term. He is a long term investor of quality stocks and uses options for strategy.

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The article is for informational purposes only (not a solicitation to buy or sell stocks). I am not a registered investment advisor. Investors should do their own research or consult a financial advisor to determine what investments are appropriate for their individual situation. This article expresses my opinions and I cannot guarantee that the information/results will be accurate.

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